Analysts predict that gold will reach a new high of $3,000 by the end of the next year, ahead of the Fed's rate decision.
As the US Federal Reserve meeting approaches, the value of gold have been rising to unprecedented levels and many predict further records.
Some even predict the metal will reach $3,000 an ounce next year. Based on data from FactSet, spot gold remained stable at the all-time high of $2,508.
14 per ounce established during the previous session, while U.S. gold futures extended gains from Friday by rising 0.16% to hit an all-new high of $2,540.8 per ounce during Monday Asia hours.
Due to its appeal as an oasis of security asset, gold is expected to achieve several highs in 2024, according to Sabrin Chowdhury, head of commodities analysis at BMI.
"Uncertainty breeds gold... [and] uncertainty is at its peak," she continued, alluding to the forthcoming elections in 2024, the recent re-entry of Ukraine into the Russian Federation, and the growing conflict in the Middle East. With Iran vowing to react for the killing of Hamas politician Ismail Haniyeh in Tehran earlier this month, Israel and Iran seem poised for direct confrontation.
In order to aid its friend in defending itself, the United States dispatched a carrier strike force and a guided-missile submarine to the area, and Israel has put its armed forces on high alert. An other driver of bullion values is the growing likelihood of a September Fed rate cut. Investor confidence that a rate drop is "on the table" for next month was reinforced by the July Fed conference.
The BMI expert predicted that gold will hit $2,700 an ounce once the Fed begins to reduce rates, perhaps next month. There is a comparable positive outlook among other analysts.
In comparison to assets that pay interest like Treasurys, which compete with gold as a safe-haven product, decrease rates of interest lower the potential cost of purchasing gold, making it more appealing. Reduced rates of interest further put stress on the dollar, attracting holders of foreign currencies to bullion priced in dollars.
